The fluctuations in value of the currency vis-a-vis the dollar, have crucial consequences on the offshore services industry. The greater the difference in the value of dollar and the local currency, the more profitable it becomes for the American businesses to outsource. And it is because of this simple economic calculation, that the Philippines call centers are unhappy with the rise in value of their currency - Peso. In the last one year, Peso has seen a 6.5 percent gain in its value, and today it stands at 40.622 per dollar.

On the other hand, the currency of India - Rupee has seen a decline of 7 percent. And one dollar is valued at 53.83 rupees. This means that for an American company, India becomes a more affordable option to outsource as compared to Philippines. President of the Business Processing Association of the Philippines (BPAP), Benedict Hernandez, said “The peso appreciation has become a significant cause for concern”. This concern was also reflected in a survey done by BPAP in December, where currency’s strength emerged as the top threat to business, leaving behind reasons like corruption, natural calamities and poor infrastructure. BPAP also expressed its worry through a conference in Manila that they were unable to meet regular revenue targets because of this adverse impact. They were already losing business to Indian counterparts because of increased competition in cost. BPAP claimed that Philippines earned revenue of around $13 billion in the past year, but India’s annual revenue generated from outsourcing is not double or triple, but a good eight times more than the revenue of Philippines.

India registered record $105 billion revenue in the last financial year. Indian call center industry, which was said to be facing a tough competition from Philippines, is back as the front runner. Those industry observers who had made premature announcements about ascendance of the Philippines call center industry are now realizing that they probably backed the wrong horse.